Use this configuration when your dataset is small so we can take advantage of the responsiveness provided by having all the data in the client (this will be used whenever you use the Preload of data and your dataset is smaller than the Records Loaded parameter) do increase the loaded records over a few hundred records as this may cause the screen to become unresponsive.
This configurations is similar to the one used for client side with the diference being the dataset size was bigger than he Records Loaded parameter. You should use it whenever you know your data set won't have thousands of records.
Use this configuration when you know you data set is huge, since preloading data won't do much for the user anyway since the probability for the record the user is looking for being in the few records preloaded is very small. Adjust the number of characters for a value that makes sense for what the user will be seraching to minimize the number or requests done. This will remove the load of the data from the preparation of the page making the page load faster when comparing to the other options.